Second quarter 2007 revenues were $75.1 million, up 6.2 percent from $70.7 million for the second quarter of 2006. Operating income was $33.9 million, or 45.1 percent of revenues, for the second quarter of 2007 compared to $32.7 million, or 46.3 percent of revenues, for the prior-year quarter. EBITDA for the second quarter of 2007 was $41.8 million compared to the second quarter 2007 guidance range of $30.0 million to $35.0 million.

Net income for the second quarter of 2007 was $22.6 million, or $0.85 per diluted share, compared to $20.3 million, or $0.73 per diluted share in the year-ago quarter. Included in net income for the second quarter of 2007 was approximately $5.8 million, or $0.22 per diluted share, of interest income, up from $3.6 million, or $0.13 per diluted share, in the second quarter of 2006. This increase in interest income was primarily driven by a higher cash position resulting from cash provided by operating activities and net proceeds raised during the company's November 2006 convertible notes offering, and to a lesser extent, a higher average interest rate earned during the second quarter of 2007.

Also included in second quarter 2007 EBITDA and net income was a $1.9 million ($1.2 million after-tax, or $0.05 per diluted share) gain on the sale of the HOS Hotshot, the company's only fast supply vessel. In the second quarter of 2006, EBITDA and net income included a gain on the sale of assets of $0.3 million ($0.2 million after-tax, or $0.01 per diluted share) resulting from the disposition of the Energy 2202, a single-hulled tank barge.

OSV Segment.

Revenues from the OSV segment were $48.6 million for the second quarter of 2007, an increase of 10.0 percent over $44.2 million for the same period in 2006. Fleetwide average OSV dayrates for the second quarter of 2007 of $21,358 improved 10.5 percent, or $2,037 per day, from $19,321 for the same period in 2006.

The OSV fleet remained at full practical utilization of 96.7 percent for the second quarter of 2007 comparable to the year-ago quarter. The company's effective, or utilization-adjusted, dayrate for the OSV segment was $20,653, which was $1,989, or 10.7percent, higher than the second quarter of 2006.

OSV operating income of $27.0 million was $4.3 million, or 18.9percent, higher than the prior-year quarter despite a 15.9 percent year-over-year increase in operating costs. This cost increase was primarily related to previously reported market-driven personnel cost increases.

TTB Segment.

Revenues from the TTB segment were $26.5 million for the second quarter of 2007, which was flat compared to the same period in 2006. Fleetwide average TTB dayrates of $17,772 were $648, or 3.5 percent, lower than the $18,420 achieved during the second quarter of 2006.

Utilization in the TTB segment for the second quarter of 2007 was 90.9 percent compared to 90.5 percent in the prior-year quarter.

TTB operating income was down from $10.0 million for the second quarter of 2006 to $6.9 million this quarter, a decrease of $3.1 million or 31.0percent. This year-over-year decrease in operating income is primarily related to the favorable impact in the second quarter of 2006 from providing non-traditional tank barge services, at higher spot dayrates, to upstream customers in the U.S. Gulf of Mexico ("GoM").

Depreciation and Amortization (D&A).

Depreciation and amortization was $0.1 million higher for the second quarter of 2007 compared to the same period in 2006 due to an increase in the number of vessel drydockings and related costs. Drydocking costs were also adversely impacted during the second quarter of 2007 by reduced shipyard availability, shipyard labor shortages and an increase in the number of the company's vessels that incurred their first 30 or 60 month regulatory drydocking. The $1.2 million increase in amortization expense was partially offset by a $1.1 million decrease in depreciation expense resulting from a change in estimated salvage values for the company's marine equipment that was effective January 1, 2007.

General and Administrative (G&A). G&A expenses for the second quarter of 2007 of $7.7 million were down $0.2 million, or 2.6 percent, over the same period in 2006, primarily due to lower shore-side incentive compensation and health insurance costs incurred during the second quarter of 2007. The company's G&A expenses were 10.2 percent of revenues for the current quarter, in-line with its industry peers and prior guidance.

First Half 2007 Results

Revenues for the first six months of 2007 increased 8.6 percent to $143.2 million compared to $131.8 million for the same period in 2006. Operating income was $60.3 million, or 42.1 percent of revenues, for the first six months of 2007 compared to $57.3 million, or 43.5 percent of revenues, for the same period in 2006. Net income for the first six months of 2007 increased 14.2 percent to $40.1 million, or $1.52 per diluted share, compared to net income of $35.1 million, or $1.27 per diluted share, for the first six months of 2006. The company's first half 2007 results were positively impacted by the market-driven increase in OSV dayrates and an increase in TTB barrel carrying capacity, compared to the six months ended June 30, 2006. The company's net income for the first six months of 2007 included a $1.9 million ($1.2 million after tax or $0.05 per share) gain on the sale of the company's fast supply vessel.

Update on Maintenance Capital Expenditures.

The company now expects maintenance capital expenditures for the third quarter of 2007 and calendar year 2007 to be approximately $12.2 million and $46.2 million, respectively, which includes discretionary vessel enhancements and the acquisition of additional equipment for the company's OSVs to support subsea operations.

Update on MPSV Program.

This program consists of two MPSV-DP2 vessels currently being converted at a domestic shipyard and one MPSV-DP3 vessel currently under construction at a European shipyard. The two MPSV-DP2 vessels are expected to be delivered in mid-2008 and the MPSV-DP3 vessel has an anticipated delivery date in the third quarter of 2009. Based on current contracts and internal estimates, the aggregate total project costs for these three vessels, before construction period interest, is expected to be in the approximate range of $250.0 million to $270.0 million, depending on final vessel configurations and changes in foreign currency exchange rates for the Eurodollar. Since the inception of this program, the company has incurred $100.0 million of project costs, with $31.8 million incurred during the second quarter of 2007.

Update on OSV Newbuild Program No. 4.

The company's fourth OSV newbuild program is comprised of a mix of nine proprietary 250 EDF class OSVs and four proprietary 240 ED class OSVs, with an aggregate capacity of about 38,000 deadweight tons, currently under construction at two domestic shipyards. Projected delivery dates for these 13 vessels range from early 2008 through early 2010. Based on current contracts and internal estimates, the aggregate total cost of this program, before construction period interest, is still expected to be approximately $305.0 million. Since the inception of this program, the company has incurred $38.7 million of project costs, with $8.2 million incurred during the second quarter of 2007.

Update on TTB Newbuild Program No. 2.

The company's second TTB newbuild program currently includes three 60,000-barrel double-hulled tank barges that are under construction at a domestic shipyard and three ocean-going tugs being retrofitted at another domestic shipyard. The first of four 3,000 horsepower ocean-going tugs purchased and converted under this newbuild program, the Michigan Service, was delivered in July 2007. The remaining vessels are expected to be delivered on various dates throughout the remainder of 2007. Based on current contracts and internal estimates, the aggregate total cost of this program, before construction period interest, is now expected to be approximately $75.0 million. Since the inception of this program, the company has incurred $47.2 million of project costs, with $12.5 million incurred during the second quarter of 2007.